“Wall Street is just loving the fact that the Fed continues to support the markets,” says John Stephenson, portfolio manager at First Asset Investment Management. And, he thinks it will ultimately mean a higher level for the Dow Jones Industrial Average (INDEXDJX:.DJI). “I think you got to buy right now. Back up the truck while the Fed’s on the sidelines. Otherwise, you’re fighting the Fed.”
Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, strongly disagrees with Stephenson. “I think the Dow Industrials are in grave danger here,” says Ross. “Don’t let the headlines fool you – the Netlfixes, the Teslas, the Googles of the world. The Dow Industrials haven’t taken out their old highs which is a very serious concern.”
According to Ross, several technical factors are pointing the market towards its 200-day moving average, which is 21% below its current price. “I’m looking for a sharp and swift decline,” says Ross. “I think you want to be a seller of [Dow] Industrial stocks here. I’m quite bearish in the short-term.”
Are the fundamental factors enough to drive the market higher or will the technical warnings Ross sees in the charts win out?
Watch the video below to see Stephenson and Ross debate the market’s next move and what the fundamentals and technicals have to say is next for the Dow.
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